McInnes Wilson Lawyers’ Canberra office recently acted for an individual that was significantly injured in a motor vehicle accident.
When a person is catastrophically injured in an accident, they may require an individual or corporate entity to manage their financial affairs. In a personal injury context, this is known as funds management. It is a separate compensable head of damage that ensures any judgment or settlement sum is appropriately managed by financial experts. It can be managed by public trustees or private companies.
In this case, the matter settled for over $5 million, but due to the nature of the injuries, the client was unable to manage the considerable sum.
The ACT Supreme Court was required to approve the settlement. Pursuant to Section 25 of the Public Trustee and Guardian Act 1985 (ACT), the funds are required to be paid into Court and to the public trustee unless the Court directs otherwise. The difficulty with this matter was that the plaintiff resided in the United States of America and intended to remain there. The Court needed to be satisfied that the settlement sum would be appropriately administered and permit an overseas entity to disperse funds by a professional trustee.
To assist the Court, affidavits were prepared by the solicitor with carriage of the matter, the plaintiff’s litigation guardian, and an attorney based in the United States who assisted in establishing the trust. Confidential advice prepared by senior and junior counsel was also provided to the Court. The documents addressed the following:
- Details about the private trustee including its corporate structure, when it was founded, an overview of assets under management and a summary of their trustee credentials and experience;
- Details of the specific trust including power, authorities and discretions conferred on the trustee;
- Confirmation that the private trustee is the final decision maker and will administer the funds to serve our client’s best interests;
- A summary of the proposed investment strategy and investment responsibilities;
- Calculation of the anticipated fees and an explanation as to their reasonableness; and
- Explaining the protection and safeguards offered by the private trustee.
In approving the settlement, the Court noted the case of Singh v. Calvary Hospital (No. 2) [2009] ACTSC 57 and Williams v. Hoang [2019] ACTSC 144 and approved settlement based on the following:
- A Special Needs Trust, which was created by a Deed, was an appropriate vehicle to hold the funds;
- The trust structure included the appointment of a specialist trustee, who had proven experience in managing similar trusts; and
- The anticipated costs associated with the trust was not unreasonable when compared to other trust structures.
It should also be noted that as a result of the funds being paid to another country, the client was entitled to a sum for transactional costs due to having to transfer the currency from Australian dollars to US dollars. Evidence was required to show the anticipated transactional costs likely to be incurred by the plaintiff.
For more information or any enquiries, contact Tim McHutchison (Canberra and Sydney) on 02 8262 2736 or tmchutchison@mcw.com.au
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